What would you do,???.

In the first pix, is that deep pitting down as much as half an inch from the top of the bore? It looks like it, but the pix is out of focus, so I am not 100% sure.

BTW, I would expect KB pistons top ring to come somewhere around .080-100" up higher in the bore than the stockers. The rings are higher on the piston, and the compression height is taller too; both push the rings up higher in the bore. So any ridge is gonna have to come out IMHO, but a beveled ridge reamer is gonna take the cut down below where the top rings travel, so that is not good.

If you are going with new pistons, and the cost of some new SCAT rods, and the re-balance work that is going to be needed, I can't see shortcutting on the block. IMHO, another block if the pitting is down as far as it looks in the 1st pix.